The market situation of
glyphosate has improved in H1 2012, which may last and improve the operating
performance of four listed glyphosate companies further in H2 2012, according
to CCM’s September Issue of Glyphsoate
China Monthly Report.
If the improved market situation
of glyphosate last in H2 2012, it's estimated that four listed glyphosate
companies' operating performance will improve further in H2 2012, or even they
all can be profitable this year (TABLE 5).
On 28 Aug., 2012, Zhejiang Wynca
Chemical Industry Group Co., Ltd. (Zhejiang Wynca) released its 2012
semi-annual report and claimed that it would achieve an estimated profit of
about USD4.26 million (RMB27 million) in Q3 2012, and thus Zhejiang Wynca would
achieve break even in net profit attributed to shareholders in the first nine
months of 2012.
On 22 Aug., 2012, Anhui Huaxing
Chemical Industry Co., Ltd. (Anhui Huaxing) released its 2012 semi-annual
report and claimed that it would achieve an estimated profit of about
USD2.13-2.92 million (RMB13.5-18.5 million) in Q3 2012, and thus Anhui Huaxing
would achieve net profit of about USD1.26-2.05 million (RMB8-13 million) in the
first nine months of 2012.
The other two listed glyphosate
companies, Nantong Jiangshan Agrochemical & Chemicals Co., Ltd. (Nantong
Jiangshan) and Jiangsu Yangnong Chemical Co., Ltd. (Jiangsu Yangnong), both
achieved good net profit in H1 2012, and it's estimated that the two companies
would maintain their good performance in the second half of this year.
The demand for glyphosate from
overseas is still very strong in Q3 2012 and is likely to last till Q4 2012, which will promote the export volume
of the four companies further. It's estimated that the revenue in the four
companies would remain stable in H2 2012, or even exceed that of the first half
of this year.
In H1 2012, the export volume of
glyphosate A. I. from Zhejiang Wynca, Nantong Jiangshan and Jiangsu Yangnong
has increased by 16%, 20% and 61% respectively, with export value increasing by
41%, 42% and 94% accordingly over that in H1 2011 (FIGURE 7). Because of the
mismanagement and shortage of operating funds, Anhui Huaxing didn't grab the
sales opportunity in H1 2012, and its export volume and value of glyphosate A.
I. decreased by 33% and 16% respectively. After the completion of acquisition
by a strong company, namely CEFC Shanghai Oil Group Co., Ltd., Anhui Huaxing's
problem of operating fund shortage and mismanagement would be improved greatly,
which would have a good effect on Anhui Huaxing's operating performance in H1
2012.
The prices of yellow phosphorous,
glycine, IDAN and PMIDA have increased little in Q3 2012, but the prices of
these raw materials except yellow phosphorous will not increase greatly in Q4
2012 due to the overcapacity and limited demand under the situation of slow
development in China's
manufacture industry. Besides, the price of glyphosate is still increasing in
Q3 2012, and it's likely to maintain at a high level in Q4 2012 mainly due to
the strong demand for glyphosate and strict environmental protection policy,
which will promote the situation of profit in the four companies further.
The development of China's
manufacture industry was very low in H1 2012 and this situation is likely to
last in H2 2012, which meant that the prices of raw materials for producing
glyphosate including yellow phosphorous will not increase greatly in H2 2012.
According to the announcement from National Bureau of Statistics of China, the
Purchase Management Index (PMI) was 49.2% in Aug, 2012, down 0.9 percentage
point over that in previous month, which was the first time to decrease below
the gloom-boom index of 50 in
China
in 2012.
Besides, the quantity of
restarting production in small and medium-sized glyphosate producers would not
be too much due to the high cost in environmental protection, leading to the
limited increase in glyphosate supply,
and thus the price of glyphosate will stay at a high level in H2 2012. It's
heard that China's Ministry
of Environmental Protection will carry out a check in China's
pesticide industry, and the companies which can't reach the waste treatment
standard will be ordered to stop production.
Furthermore, in H1 2012, the
operating rate and gross profit margin of glyphosate business of Zhejiang
Wynca, Nantong Jiangshan and Jiangsu Yangnong in H1 2012 was about 100%, 90%,
70% and 11%, 5%, 10% respectively, all increased over that in H1 2011. The
operating rate of Anhui Huaxing in H1 2012 was about 39%, down 17 percentage
points over that in H1 2011, but its gross profit margin in glyphosate business
was 9%, up seven percentage points over that in H1 2011. After solving the problem
of operating fund shortage, it's estimated that the operating rate of Anhui
Huaxing would increase in H2 2012.
According to CCM' s analysis report on glyphosate price, as to
Aug. 2012, the price of glyphosate technical was about USD4,646/t, up 22% over
that in Jan. 2012 (FIGURE 7).
The prosperity in China's
glyphosate industry resulting from the improved market situation of glyphosate
is a special scenery in China's bleak chemical industry at present, but for the
glyphosate producers which have witnessed the miserable situation in China's
glyphosate industry in the past three years, how to improve the operating
performance would be the most important thing in H2 2012 and the future coming
years.
Source: Glyphsoate China Monthly Report 1209
Content of Glyphsoate China
Monthly Report 1209:
Zhejiang Wynca suffers huge profit loss in H1
2012
Anhui Huaxing can't turn loss into gain in H1
2012
Jiangsu Yangnong: Glyphosate business promotes its operating performance in H1
2012
Nantong Jiangshan is unsuccessful to sell
glycine-supply subsidiary——Dongchang Chemical
Operating performance of four listed
glyphosate companies may improve further in H2 2012
China's glyphosate industry: Market integration is accelerating in 2012
Overview of export rebate abolishment in China's
glyphosate technical from August 2009 to July 2012
Zhejiang Wynca achieves breakthrough on
treatment technique of glyphosate wastewater
Glyphosate price continues to surge in
September 2012
Export price of glyphosate technical
increases by 3.17% in July 2012
Glyphosate China Monthly Report, a monthly publication issued by CCM
International on 20th of every
month, will keep track of
latest dynamics, hotspots and competitiveness analysis, and forecasts on market
trends of China’s glyphosate industry.
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CCM
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